All Forum Posts by: Sam W.

Val Dufour

Normally these outfits significantly under-state/estimate expenses. A good rule of thumb is to estimate expenses at 50% of gross rents. Then subtract out the mortage costs and see if you are still cash-flowing $300-$500 / month.

I have electric baseboard heat in a 3-unit I have owned for about a year. As Brandon Turner states, it is a killer for the tenants' electric bills. They love their apartments but hate the electric bills.

I'm going to put a vented gas wall unit in each apartment this summer to handle the bulk of the heating load. Will have to run gas lines, but I can do two of the three from the basement...and will use the basement stairway as a good place to run the line upstairs.

In my opinion, up north, electric baseboard heat is a sure-fire way to discourage tenants from staying beyond their initial lease term.

Nik Parks

That's why I said in my post (above) that your appraisal will need to come in at about $133,000.......($133K x 75% LTV) = $100K refinance amount.

$100K - $80K (original mortgage) = $20K for your investor

Hey Joshua S. - welcome to BP.

If you self-manage the property you're probably looking at about $90/month in positive cash flow over the long term (at $1300/month rent and 40% expenses).

Not great but not bad. Given that you only have $20K equity in the house (if you can get market value), I would keep it for a few more years until MV was more favorable.

Maybe a partner (with cash) in the area.

Remember Nik Parks - in your example you have an $80K mortgage on the property that will consume most of the $82.5K you'll get when you refinance.

In your example, you will need to have the appraisal come in at about $133,000 to be able to pay the investor back his/her $20,000.

As an aside, borrowing your down payment from an investor may cause problems with your lenders.

Lee Reitzel

Welcome to BP.

I admire your determination. I have no doubt you will succeed. Continue to study, learn, listen and save.

The greatest advice I see here on BP for folks just starting out is to apprentice with seasoned investors in your area. Just like in the old-days, you work for free in order to gain the experience. I'm sure you could even put out a call on BP for mentors on Long Island willing to take on an apprentice.

Good luck Lee

Is it a REO? If from a private seller, and you can reach agreement on the numbers, maybe the seller will agree to allow you to throw some cabinets in prior to the appraisal. How much work needs done?

If an REO, see if the bank will go that route. Gov't -owned (HUD, Fannie, VA, etc) almost never will let you. Perhaps a bank might.

Not a loan / financing expert, but would a construction loan work?

Hey Dan Fields,

Thanks for serving, and welcome to BP.

My niece (AF wife) and nephew (Active Duty AF) are both at Hurlburt.

I think you'll find a great deal of information here...regardless of what direction in RE investing you choose to go.

Ask questions, learn, connect.

Sam